The Division of Local Government is monitoring the situation at Liverpool Council after reports last year mayor Ned Mannoun had written a letter of complaint.
A spokeswoman for the division said she "could confirm that it is not conducting a formal investigation into matters at Liverpool Council".
Last month Cr Mannoun told the Champion he had written letters to the Independent Commission Against Corruption, the Division of Local Government and the public interest disclosures unit of the NSW Ombudsman asking them to investigate a number of matters.
The spokeswoman would not confirm whether complaints had also been lodged with the division after the mayor failed to get quorum to debate staffing at the December 18 meeting and suspended the session after keeping the gallery waiting for two hours.
"It is recognised as good practice to maintain confidentiality generally in relation to the management of complaints as provided in various complaint handling publications produced by the NSW Ombudsman's office," she said.
"Publishing or airing details of complaints or the processes being undertaken during the complaint handling process could compromise the effective management of those complaints."
Liverpool Council finances were ruled as being in a "sound and stable" position by an auditor from PriceWaterhouseCoopers.
Auditor Dennis Banicevic made a presentation about the 2012/2013 figures at the council's December meeting.
"The books of account and records inspected have been kept in an accurate and conscientious manner," his report said.
He said the council was operating with a $47 million surplus and its cash position had increased from $116 million in the previous year to $126 million.